The profit growth of polyester giants is returning to the market's attention at a near-'frenzied' pace. Following Hengyi Petrochemical's forecast of a 23-fold increase in first-half net profit, Dongfang Shenghong released its performance forecast on July 5: net profit attributable to shareholders for the first half of 2026 is expected to be between 4.2 billion and 5 billion yuan, a year-on-year increase of 987.39% to 1194.51%. The second-quarter net profit increased by 93% to 149% quarter-on-quarter, and by 60 to 78 times year-on-year.
This set of numbers has revived the saying 'polyester has become a money-printing machine' within the industry. However, the question that needs to be asked is: Is this explosive growth a sustainable industrial recovery, or a one-time concentration of short-term geopolitical dividends?
Geopolitical Dividends: Refining Benefits from Oil Price Transmission
In early 2026, the escalation of the US-Iran conflict led to a temporary blockade of the Strait of Hormuz, driving Brent crude oil from $61 per barrel at the beginning of the year to a peak of $118 per barrel in March, with the second-quarter average stabilizing around $99 per barrel. For the polyester industry chain, which uses crude oil as a raw material, rising oil prices directly pushed up the prices of intermediate products such as PX and PTA.
However, the key point is that Chinese refining companies have relatively diversified crude oil import channels, and the impact of the geopolitical blockade is far less than that on countries with single procurement sources like Japan and South Korea. This means that domestic leaders not only avoided cost losses from the oil price surge but also benefited from the expansion of product price spreads through integrated refining and chemical projects. Dongfang Shenghong explicitly stated in its performance forecast: 'The upward movement of crude oil prices drove the expansion of product price spreads, and the integrated refining and chemical project operated smoothly with smooth production and sales' – this is a direct micro-level reflection of the geopolitical dividend.
Anti-Involution: Capacity Clearance Cedes Market Share
If rising oil prices represent 'timing,' then the 'anti-involution' within the industry chain is a more noteworthy industrial logic. Over the past two years, the PX-PTA-polyester filament chain has seen price wars that caused PTA to lose 200 yuan per ton at its lowest. But in 2026, the situation fundamentally changed.
Industry public data shows that there were no new PTA capacity additions in 2026; instead, outdated capacity both domestically and internationally accelerated its exit. Institutional research reports indicate that the current round of capacity expansion is nearing its end, and the 'anti-involution' policy continues to advance, expecting further improvement in supply-demand dynamics. For Dongfang Shenghong, which has 2.8 million tons of PX and 6.3 million tons of PTA capacity, the exit of outdated capacity means increased market concentration, with leading companies expanding their bargaining power and profit margins.
This explains why the performance forecasts of Hengyi and Shenghong are so impressive – they are not 'fleecing' customers through price hikes, but rather, after industry clearance, they have seized the market share ceded by competitors with lower costs and higher operating rates.
Transmission and Risks for Downstream Buyers
What does the surge in polyester giants' profits mean for downstream weaving and fabric companies? In the short term, a rise in the raw material price center is inevitable. As the main raw material for fabrics, price fluctuations of polyester filament will directly transmit to the grey fabric and dyeing stages. Buyers need to be wary: when upstream profits recover to historical highs, will it trigger a new round of expansion impulse?
Currently, international oil prices have corrected after the easing of geopolitical conflicts, but the dividend from 'anti-involution' capacity clearance is only beginning to materialize. This suggests that the supply pattern of polyester raw materials may remain tight in the second half of 2026, with prices prone to rise rather than fall. However, for small and medium-sized enterprises with low integration, cost pressures may further increase.